Barclays investor sells £900m stake
Barclays saw share prices dip yesterday after a top investor offloaded a £900m stake in the bank. Goldman Sachs, which ran the sale, did not identify the seller who sold 599m shares in the group – with this equal to 3.6% of its stock. Only a small number of investors — the Qatar Investment Authority, BlackRock, Vanguard and Capital Group — have holdings big enough to be responsible for the disposal. The sale came the day after Barclays revealed it is facing a £450m hit and regulatory investigations over issues with the sale of basic trading products in the US. Barclays accidentally issued more complex structured products and exchange traded notes in the United States in 2019 than it had permission for from regulators. The bank was allowed to sell $20.8bn worth of the securities but exceeded that limit by $15.2bn. The error means Barclays has stopped the sale of new retail structured products in the US while authorities conduct regulatory investigations. Capital Group sold 399m shares on Monday and around £2.8bn has been wiped off the company's value in the space of a week. The bank’s share price has lost more than 16% of its value this year.
Private equity firms buy TV rating group
A consortium of private equity firms led by Elliott Management and Brookfield Asset Management will take TV rating company Nielsen Holdings private in a $10bn deal. The Nielsen board rejected a previous Elliott bid just over a week ago but was swayed by a 10% increase in the offer.
Bank of Italy bans N26 from taking on new clients
The Bank of Italy has banned the local unit of online German bank N26 from taking on new customers after checks flagged “significant shortcomings in complying with anti-money laundering regulation”. It has also prohibited N26 from offering new products and services, such as cryptoassets, to existing clients.
Bellway builds record number of homes
Developer Bellway believes soaring inflation is unlikely to hit the profits of housebuilders as property prices are climbing even faster, although CEO Jason Honeyman said price growth could hit demand. The firm built a record 5,694 houses during the first half of its financial year. It beat the previous high set 12 months ago by 38 but revealed a further bill for high-rise fire safety works. Bellway has set aside an extra £22m to deal with building material inflation. Bellway's pre-tax profits for the six months to the end of January rose by 9.3% to £307.6m, while revenues rose 3.5% to £1.8bn. Its order book has grown since the end of January, to 7,491 homes worth £2.2bn as of March 13, against £1.6bn a year ago.
Crypto firms could move abroad as FCA deadline nears
The Times’ Ben Martin says Britain’s cryptocurrency sector “faces a crunch moment” when a deadline for firms either to secure Financial Conduct Authority (FCA) approval or to put a stop to their UK operations expires tomorrow. He warns that with the City watchdog’s temporary registration regime for companies offering crypto services coming to end, the deadline “poses considerable uncertainty” for the 12 businesses that remain only temporarily registered with the regulator. Mr Martin notes that the temporary register was originally due to expire in July last year before the regulator pushed back the end date, and suggests another extension is possible. The FCA established a temporary register in December 2020 to allow companies waiting for the watchdog to assess their applications for permanent approval to continue operating. So far, 33 businesses have joined the FCA’s permanent register.
FCA sees cyber incident reports jump 52%
Analysis by Picus Security shows that the Financial Conduct Authority received 116 reports of cyber security incidents in 2021, up from 76 in 2020. This marks an increase of 52%, year-on-year. Of the incidents reported, 65% were due to cyber-attacks and approximately a third contained notifications where the confidentiality of company or personal data may have been compromised or breached. It was found that one in five incidents reported to the FCA in 2021 involved ransomware. Suleyman Ozarslan, co-founder of Picus Security and VP of Picus Labs, said: “Financial services firms are amongst the best prepared and most highly capable organisations at detecting and responding to cyber incidents. Yet, despite investing heavily in security and data protection, it’s clear that many continue to experience challenges in these areas.”
MPs: FCA funeral rules come at difficult time for sector
The All-Party Parliamentary Group for Funerals and Bereavement says the Financial Conduct Authority’s (FCA) requirement for all prepaid funeral providers to get authorised by July 29 comes at a difficult time for the sector. The group of MPs led by Sir John Hayes said that while legislation requires companies to achieve FCA authorisation by July 29, the process requires thousands of businesses to be authorised and tens of thousands of staff to be trained “at a time when the sector is still having to work hard to try and deal with the issues from the pandemic.” The prepaid funeral sector has been overseen by the Funeral Planning Authority, a voluntary body which was set up in 2002. However, following a review by the treasury, the FCA will take responsibility for the sector as of July. Once funeral plan providers come under the FCA’s jurisdiction, funeral plan customers will be able to make a complaint to the Financial Ombudsman Service.
LV= sees profits fall
Mutual insurer LV= saw strong revenue growth over the past year, although operating profit fell. The firm’s total trading profit surged by 222% from £9m to £29m in 2021, while operating profit slipped by 22% year-on-year from £40m to £31m. LV= shared £38m worth of bonuses with eligible members over the period. The group said it “outperformed targets for sales and profitability and enhanced the sustainability of the business” and managed to double inflows into Smooth Managed Funds.
Barclays expects Admiral to accelerate
Admiral and Direct Line are expected to reap the benefits as more drivers return to the road after the pandemic. Investors are being advised to up their holdings in the FTSE-listed insurance firms as analysts anticipate more claims and higher insurance premiums. In a note to investors, Barclays said Admiral was well placed to profit from an expected increase in claims frequency.
Lord Hill: City maintains lead in financial services
The City of London has maintained its huge lead in financial services in the years following the Brexit vote, Britain's last European Union commissioner has said. Lord Hill told the Lords’ European Affairs Committee that instead of rapidly losing business across the Channel, Britain’s financiers have adapted. He said: “Many of us thought that after 2016 things would change quite quickly. My former officials in Brussels certainly thought they would. If I look at it, I am more struck by the fact that London is still Europe’s largest financial centre. No other single financial centres in Europe have so far supplanted London’s place.”
Babcock in talks to offload emergency aviation arm
Defence contractor Babcock International is in talks to sell most of its division that provides emergency plane and helicopter services to infrastructure investor Ancala Partners.
Demand pushes house prices to £245k
Data from Zoopla shows that UK house prices have hit an average of £245,200, with this marking a year-on-year increase of 8.1%. The report shows that new listings of homes for sale rose 5% above the five-year average last month, with listings for sale across the average estate agency branch up 3.5% in the 28 days to March 20. The stock of homes available to buy was 42% below the 5-year average, compared to 47% lower in December. It was also found that sales agreed in Q1 were up 38% compared to Q1 2020. While Zoopla says buyer demand remains "unseasonably strong", looking ahead, the firm’s head of research, Gráinne Gilmore, pointed to the “increased economic headwinds”, including the rising costs of living and increasing mortgage rates, saying these mean property price growth “will start to moderate as we move through the second half of 2022."
Supermarket inflation hits 10-year high
Research shows that supermarket inflation has now hit 5.2%, the highest level since 2012. Prices are soaring as manufacturers and grocers are faced with climbing energy costs and higher wages. With costs rising, shoppers are turning to discount retailers and own brand products, with Aldi and Lidl the only supermarkets seeing year-on-year growth in market share. Analysis also shows that own label products now account for 50.6% of all spending, an increase on the 49.9% recorded last year.
Consumer lending surges to £1.9bn
Figures from the Bank of England (BoE) show that lending to consumers rose by the most in nearly five years in February, jumping 90% compared to January. Consumer credit rose by a net £1.9bn, with this driven by a record rise in credit card borrowing, which hit £1.5bn. The Bank said the increase pushed the annual growth rate for all forms of unsecured credit from 3.2% to a two-year high of 4.4%, raising the total outstanding balance of consumer credit to £199.5bn. Reflecting on the BoE report, Samuel Tombs, chief economist at Pantheon Macroeconomics, said: “The big rise in consumer borrowing in February – the largest since April 2018 – likely reflects households attempting to maintain their consumption at a time when real disposable income is falling sharply, rather than them going on a spending spree.” Meanwhile, BoE data also shows that lenders approved 70,993 mortgages last month, down from 73,841 in January.